Johannesburg - South Africa's central bank governor Tito Mboweni said a six percent rise in electricity tariffs would be reasonable and anything above that would stoke inflation.
The National Energy Regulator of South Africa (Nersa) is considering a proposal by state-run power utility Eskom to sharply raise electricity tariffs to fund a R350bn expansion.
South Africa is facing an electricity shortage and needs new power plants to come on line to boost supply.
"Our view is that whatever level of increase in the tariffs is granted should not put undue pressure on inflation. My preference obviously might not make business sense to Eskom, but electricity prices must not be adjusted more than 6% per annum," Mboweni told CNBC Africa in an interview.
"Six percent would be reasonable. Clearly what they are asking is so far removed from 6% that the impact on inflation would be great."